Steam power, Electricity, Internet…3D printing?

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3D printing or additive manufacturing is a 30 years old disruptive innovation that is finally scaling up. It will revolutionize manufacturing, supply chains, business models and our individual relationships to objects through customization.

To make it simple, the starting point is the Internet download of a 3D sketch created somewhere in the world. Next, as if by magic, you can produce something layer by layer on the other side of the world. (See the collaborative 3D printing site: http://www.shapeways.com/) It started with plastic and now spreads to an increasingly wide range of materials, such as metal, glass, sand and concrete. 3D printing will challenge the need for traditional manufacturing sites, finished goods transportation and part of the human intervention.

Initially very expensive 3D printing devices were used for industrial prototyping. Today, plastic toys or shoes can be manufactured at home or in a shop with a 300 to 2,000$ 3D printer. 3D printed urgent replacement parts in plastic and even metal for automotive or industrial equipment are more and more frequent (See Stratasys, one of the leading 3D printing company: http://www.stratasys.com/). The last 3D fashion is military drones printing. Usually military projects turn one day or the other into public use…did you ever dream of your own 3D printed airplane? Even better, 3D printing of concrete buildings could be a couple of years away.

And finally, 3D printing of human organs based on donors’ cells, is in development with obvious health benefits, though it will clearly generate heated ethical debates.

In front of radical innovation, companies usually react in 3 different ways

1) Adopt the ostrich approach

They underestimate the threat and continue business as usual. They claim that it will take time to ramp up, which is often true. They do not want to lose focus on generating revenues in their core business by diverting resources to enter unknown territories. In reality, they are often stuck in management paralysis between short-term financial goals and the long-term vision and innovation investments necessary to enable survival. When they take their head out of the sand to react, it is often way too late. They did not develop the internal expertise related to the new technology or business model and cannot catch up anymore. One of the most well-known cases of ostrich approach confronted to radical innovation is Kodak against digital photography…What? You don’t recall what used to be the leading brand of photographic material?

2) Fight for their core business

Many companies react to radical innovation by overestimating the resilience ability of their core business. They rely on incremental innovation and try to increase the performance of existing technologies. For instance, smaller hard drives, bigger storage capacity. Well, could it be that they missed the arrival of the flash memory technology that is also now being replaced by “the Cloud”. Did you ever hear about a smart phone or tablet that uses the hard drive technology of the 90’s? Another typical reaction is fighting on price to protect market share. It ultimately implies that they need to adopt a cost leadership strategy, which will diminish their capability to innovate due to R&D budget cuts. They also loose the “cool factor” that would attract talents with creative minds. Finally, many also choose to sue in order to overwhelm opponents with lawyers’ bills. Think about the music industry fight against Napster. Well, Napster had a rough time, but Compact Disks are dying anyway. Instead of spending legal fees, music labels should have better played the VC role to fund companies like Spotify or Deezer, rather than having to buy them at higher prices later on.

3) Consider the opportunity

Any radical innovation is both a threat and an opportunity for clear-sighted minds. Companies that are directly affected by a radical innovation threatening to substitute their product should brainstorm on how to be part of it! For instance, if your business is to bond products, whether with glue, nails or screws, it is obvious that you should react and be part of the 3D revolution. Who will need adhesive to glue shoes parts in the future, if Nike and all others convert massively to 3D printing! But if you react now, you could make sure that the 3D printing powder contains adhesives on top of the structural polymers, because it brings added features to the final product. If you are a raw material supplier, you should consider changing your standard packaging unit towards smaller sizes and develop a broader distribution network to serve the needs of decentralized mini-manufacturing sites. And of course, if you are a logistic provider focusing on 24 tons truck deliveries, you might want to explore how DHL is shipping small parcels.

However, adopting the “consider the opportunity mindset” is not so easy: your own people will be resistant to change and too slow to learn and implement.

Forward-thinking companies usually adopt some of the principles hereafter:

1) Create a study group of “open-minded” champions to assess the threat and opportunity potential

2) Gain expertise with open innovation or by recruiting experts

3) Isolate their new development group from core business (incubator approach)

4) Identify lead-users and partners and define what each party can bring to the other

5) Use an open innovation channel to market or piggy-back on a specialist company